IRR-Coastal New Jersey Mid-Year Viewpoint 2015 Local Market Report - Multifamily
The Coastal New Jersey Apartment market continues to be strong through Mid-Year 2015 with extremely low vacancy rates, increasing rental rates, and few, if any, rental concessions. While consistent with broader regional trends, much of the strength of the northern shore region is also a result of displacements brought about by Superstorm Sandy. The existing vacancy has remained at terminally low levels indicating insufficient product available to satisfy market demand.
There has been little change in the market over the past several quarters with vacancy rates hovering at historic lows and healthy rental rate increases. As has historically been the case, the Monmouth and Ocean County apartment market continues to experience stronger rental rate increases and lower vacancy rates as compared to the Atlantic and Cape May market. While the Atlantic County rental market remains strong, it continues to be negatively impacted by the stubbornly high unemployment rate and the contraction in the Atlantic City gaming market.
There is significant strength in the northern shore area which benefits from public transportation to the more densely developed employment centers to the north within Northern New Jersey and New York City. A majority of the new construction apartment projects in the region are subsidized projects, with most receiving significant federal funding from Superstorm Sandy relief. Otherwise, barriers to entry for new product remains high. Currently under construction is “West Side Lofts”, a 92 unit luxury mixed-use project located in downtown Red Bank. This amenity-rich project is proximate the Red Bank Train Station and the downtown central business district. The market remains in an expansion phase; however, there remains a significant land inventory of proposed or planned projects throughout the region, which, if construction is not phased properly, could result in an increase in vacancy rates and contraction in rental rates leading to hypersupply.
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IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.